THE Supreme Court held that disputes involving condominium contracts should be decided by the Human Settlement Adjudication Commission (HSAC) and not the Regional Trial Court.
HSAC is formerly known as the Housing and Land Use Regulatory Board (HLURB).
This was the gist of an April 2, 2025 decision penned by Associate Justice Henri Jean Paul Inting, where the SC’s Second Division nullified the RTC ruling that held Vivien Cadungog and Sung Ha Jung civilly liable to each other over a contract to sell a condo unit.
Concurring with the decision were Associate Justices Japar Dimaampao, Samuel Gaerlan, and Alfredo Benjamin Caguioa.
Records of the case showed that Cadungog, a developer of a condominium building in Cebu City, agreed to deliver a unit to Sung once he completed the P3.5 million payment.
Sung said he paid a down payment of P175,000 and later P3 million, leaving a balance of P258,950.
Due to the unpaid amount, Cadungog refused to deliver the unit to Sung, prompting the latter to complain to the Cebu City RTC for violation of Presidential Decree 957 or the Subdivision and Condominium Buyer’s Protective Decree.
The RTC, in a ruling dated Sept. 16, 2011, cleared Cadungog of criminal liability but still ordered her to deliver the condo unit upon full payment of the purchase price or return the amount Sung had paid.
Cadungog challenged the ruling, arguing that the RTC had no jurisdiction over the case, adding that it should have been handled by HLURB.
However, the Court of Appeals, in a ruling dated August 20, 2019, dismissed her appeal, ruling that under the 2000 Rules on Criminal Procedure, civil liability is automatically included in a criminal case unless specifically waived.
Cadungog appealed the ruling before the SC, which ruled in her favor.
The high court explained that while civil liability can be decided in a criminal case, this does not apply when the liability arises from a contract, as in this case.
“As the full purchase price remained unpaid, petitioner’s (Cadungog) obligation to deliver the condominium unit to respondent did not arise, thereby negating petitioner’s purported violation of Presidential Decree 957,” the SC held.
Citing Section 3 of the said decree, the SC said the RTC has no jurisdiction to rule on the parties’ civil liability arising from the contract to sell entered into by them.
“THE RTC rendered the judgment on the civil liability of the parties without jurisdiction over the subject matter of the case, it pertained to the parties’ breach of contractual obligations, which is under the exclusive jurisdiction of the HLURB,” it said.
“Following the rule that a court without jurisdiction cannot render a valid judgment, the ruling of the RTC on the civil liability is therefore null and void for lack of jurisdiction,” it added.
